At the end of its first month of operations, Watson Answering Service Inc. has the following unadjusted trial balance.

Other data:
1. Insurance expires at the rate of $200 per month.
2. $1,000 of supplies are on hand at August 31.
3. Monthly depreciation on the equipment is $900.
4. Interest of $500 on the notes payable has accrued during August.
Instructions

(a) Prepare a worksheet.

(b) Prepare a classified balance sheet assuming $35,000 of the notes payable are long-term.

(c) Journalize the closing entries.

Transcribed Image Text:

Watson Answering Service Inc. August 31, 2014 Trial Balance Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable Common Stock Dividends Service Revenue Salaries and Wages Expense Utilities Expense Advertising Expense Debit $ 5,400 2,800 1,300 2,400 60,000 1,000 3,200 800 400 $77,300 Credit $40,000 2,400 30,000 4,900 $77,300